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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 0-13546
 APACHE OFFSHORE INVESTMENT PARTNERSHIP
 Delaware
(State or other jurisdiction of incorporation or organization)
    
    41-1464066
(I.R.S. Employer Identification No.)
 One Post Oak Central, 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400
 (713) 296-6000
 Securities registered pursuant to Section 12(b) of the Act: None
 Securities registered pursuant to Section 12(g) of the Act: Partnership Units
 o þ
 o þ
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do
not check if a smaller reporting company)
 o þ
 Aggregate market value of the voting and non-voting common
equity held by non-affiliates of registrant as of June 30, 2009
    
    $
    10,434,732
 DOCUMENTS INCORPORATED BY REFERENCE:




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TABLE OF CONTENTS
 DESCRIPTION
 Item
    
    
    
    PagePART I1.
    
    BUSINESS
    
    
    11A.
    
    RISK FACTORS
    
    
    31B.
    
    UNRESOLVED STAFF COMMENTS
    
    
    72.
    
    PROPERTIES
    
    
    73.
    
    LEGAL PROCEEDINGS
    
    
    94.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    9PART II5.
    
    MARKET FOR THE PARTNERSHIPS SECURITIES AND RELATED SECURITY HOLDER MATTERS
    
    
    106.
    
    SELECTED FINANCIAL DATA
    
    
    107.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    
    117A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    178.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    199.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    379A.
    
    CONTROLS AND PROCEDURES
    
    
    379B.
    
    OTHER INFORMATION
    
    
    37PART III10.
    
    DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
    
    
    3811.
    
    EXECUTIVE COMPENSATION
    
    
    3812.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    
    
    3813.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    3814.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    38PART IV15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
    
    
    39EX-23.1EX-31.1EX-31.2EX-32.1EX-99.1




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PART I
 
 ITEM 1.
    
    BUSINESS
 General
       1




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2009 Results and Business Development
     Marketing
    2




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ITEM 1A.
    
    RISK FACTORS
  Future economic conditions in the U.S. and key international markets may materially adversely
impact the Partnerships operating results.
  Crude oil and natural gas prices are volatile and a substantial reduction in these prices could
adversely affect our results.
  
    
    worldwide and domestic supplies of crude oil and natural gas;
    
    actions taken by foreign oil and gas producing nations;
    
    political conditions and events (including instability or armed conflict) in
crude oil or natural gas producing regions;
    
    the level of global crude oil and natural gas inventories;
    
    the price and level of imported foreign crude oil and natural gas;
    
    the price and availability of alternative fuels, including coal and biofuels;
    
    the availability of pipeline capacity and infrastructure;
    
    the availability of crude oil transportation and refining capacity;
    
    weather conditions;
    
    electricity generation;
    
    domestic and foreign governmental regulations and taxes; and
    
    the overall economic environment.
  
    
    limiting our financial condition, liquidity, and/or ability to fund planned capital expenditures and operations;
    
    reducing the amount of crude oil and natural gas that we can produce economically;
 3




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
    
    causing us to delay or postpone some of our capital projects;
    
    reducing our revenues, operating income and cash flows;
    
    a reduction in the carrying value of our crude oil and natural gas properties; or
 Our ability to sell natural gas or oil and/or receive market prices for our natural gas or oil may
be adversely affected by pipeline and gathering system capacity constraints and various
transportation interruptions.
  Weather and climate change may have a significant adverse impact on our revenues and productivity.
  Declining commodity prices may require the Partnership to reduce capital expenditures or
distributions to partners, or both, as cash from operating activities decline.
  We are exposed to counterparty credit risk as a result of our receivables.
  The Partnership may not realize an adequate return on its drilling activities.
  
    
    unexpected drilling conditions;
    
    pressure or irregularities in formations;
    
    equipment failures or accidents;
    
    fires, explosions, blow-outs and surface cratering;
    
    marine risks such as capsizing, collisions and hurricanes;
    
    other adverse weather conditions; and
 4




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
    
    increase in cost of, or shortages or delays in the delivery of equipment.
  Crude oil and natural gas reserves are estimates, and actual recoveries may vary significantly.
  
    
    historical production from the area compared with production from other areas;
    
    the assumed effects of regulations by governmental agencies, including the
impact of the SECs new oil and gas company reserves reporting requirements;
    
    assumptions concerning future crude oil and natural gas prices;
    
    future operating costs;
    
    development costs; and
    
    workover and remediation costs.
  The Partnership may incur significant costs related to environmental matters.
  Our operations are subject to governmental risks that may impact our operations.
  Pending regulations related to emissions and the impact of any changes in climate could adversely
impact our business.
  5




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Proposed federal regulation regarding hydraulic fracturing could increase our operating and capital
costs.
   We have limited control over the activities on properties we do not operate.
  The Partnership faces significant industry competition.
  Insurance policies do not cover all risks.
  6




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ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
 Acreage
  Developed AcreageLease Block
    
    State
    
    
    Gross Acres
    
    
    Net AcresShip Shoal 258, 259
    
    LA
    
    
    10,141
    
    
    
    638South Timbalier 276, 295, 296
    
    LA
    
    
    15,000
    
    
    
    1,063North Padre Island 969, 976
    
    TX
    
    
    10,080
    
    
    
    714Matagorda Island 681, 682
    
    TX
    
    
    10,840
    
    
    
    68146,061
    
    
    
    3,096
  Productive Oil and Gas Wells
  Gas
    
    
    OilLease Block
    
    State
    
    
    Gross
    
    
    Net
    
    
    Gross
    
    
    NetShip Shoal 258, 259
    
    LA
    
    
    7
    
    
    
    .44
    
    
    
    
    
    
    
    South Timbalier 276, 295, 296
    
    LA
    
    
    1
    
    
    
    .07
    
    
    
    19
    
    
    
    1.35North Padre Island 969, 976
    
    TX
    
    
    6
    
    
    
    .43
    
    
    
    
    
    
    
    Matagorda Island 681, 682
    
    TX
    
    
    4
    
    
    
    .25
    
    
    
    
    
    
    
    18
    
    
    
    1.19
    
    
    
    19
    
    
    
    1.35
 Net Wells Drilled
  Net Exploratory
    
    
    Net DevelopmentYear
    
    Productive
    
    
    Dry
    
    
    Total
    
    
    Productive
    
    
    Dry
    
    
    Total2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    .07
    
    
    
    .072007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 7




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Production and Pricing Data
  Production
    
    
    Average Lease
    
    
    Average Sales PriceOil
    
    
    NGLs
    
    
    Gas
    
    
    Operating
    
    
    Oil
    
    
    NGLs
    
    GasYear Ended December 31,
    
    (Mbbls)
    
    
    (Mbbls)
    
    
    (MMcf)
    
    
    Cost per   Mcfe
    
    
    (Per bbl)
    
    
    (Per bbl)
    
    
    (Per Mcf)2009South Timbalier 295
    
    
    34
    
    
    
    4
    
    
    
    61
    
    
    $
    1.57
    
    
    $
    57.25
    
    
    $
    31.90
    
    
    $
    4.04Other fields
    
    
    2
    
    
    
    2
    
    
    
    470
    
    
    
    2.19
    
    
    
    64.36
    
    
    
    32.35
    
    
    
    3.87Total
    
    
    36
    
    
    
    6
    
    
    
    531
    
    
    $
    1.96
    
    
    $
    57.60
    
    
    $
    32.07
    
    
    $
    3.892008South Timbalier 295
    
    
    29
    
    
    
    3
    
    
    
    54
    
    
    $
    1.69
    
    
    $
    110.58
    
    
    $
    59.85
    
    
    $
    9.24Other fields
    
    
    2
    
    
    
    3
    
    
    
    414
    
    
    
    1.83
    
    
    
    111.25
    
    
    
    60.94
    
    
    
    8.89Total
    
    
    31
    
    
    
    6
    
    
    
    468
    
    
    $
    1.78
    
    
    $
    110.61
    
    
    $
    60.32
    
    
    $
    8.932007South Timbalier 295
    
    
    42
    
    
    
    3
    
    
    
    81
    
    
    $
    1.17
    
    
    $
    74.33
    
    
    $
    41.03
    
    
    $
    7.77Other fields
    
    
    3
    
    
    
    7
    
    
    
    474
    
    
    
    2.04
    
    
    
    70.21
    
    
    
    47.18
    
    
    
    6.99Total
    
    
    45
    
    
    
    10
    
    
    
    555
    
    
    $
    1.69
    
    
    $
    74.07
    
    
    $
    45.05
    
    
    $
    7.10
  Estimated Proved Reserves and Future Net Cash Flows
 , Oil and Gas Reserve Estimation and
Disclosures Extractive IndustriesOil and Gas
   8




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Oil
    
    NGL
    
    Gas(Mbbls)
    
    (Mbbls)
    
    (MMcf)Proved developed
    
    
    474
    
    
    
    81
    
    
    
    2,322Proved undeveloped
    
    
    
    
    
    
    
    
    
    
    105Total proved
    
    
    474
    
    
    
    81
    
    
    
    2,427
       
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  9




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PART II
 
 ITEM 5. MARKET FOR THE PARTNERSHIPS SECURITIES AND RELATED SECURITY HOLDER MATTERS
    
 ITEM 6. SELECTED FINANCIAL DATA
  As of or For the Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In thousands, except per Unit amounts)Total assets
    
    $
    8,236
    
    
    $
    6,680
    
    
    $
    8,308
    
    
    $
    8,629
    
    
    $
    11,624Partners capital
    
    $
    6,086
    
    
    $
    5,191
    
    
    $
    6,960
    
    
    $
    7,625
    
    
    $
    10,311Oil and gas sales
    
    $
    4,311
    
    
    $
    7,928
    
    
    $
    7,679
    
    
    $
    10,255
    
    
    $
    14,779Net income
    
    $
    1,332
    
    
    $
    5,335
    
    
    $
    4,834
    
    
    $
    7,149
    
    
    $
    11,048Net income allocated to:Managing Partner
    
    $
    447
    
    
    $
    1,229
    
    
    $
    1,146
    
    
    $
    1,702
    
    
    $
    2,555Investing Partners
    
    
    885
    
    
    
    4,106
    
    
    
    3,688
    
    
    
    5,447
    
    
    
    8,493$
    1,332
    
    
    $
    5,335
    
    
    $
    4,834
    
    
    $
    7,149
    
    
    $
    11,048Net income per Investing
Partner Unit
    
    $
    867
    
    
    $
    3,976
    
    
    $
    3,531
    
    
    $
    5,178
    
    
    $
    8,048Cash distributions per
Investing Partner Unit
    
    $
    
    
    
    $
    5,500
    
    
    $
    4,000
    
    
    $
    7,500
    
    
    $
    9,000
 10




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
      Results of Operations
  Net Income and Revenue
    11




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The Partnerships oil and gas production volume and price information is summarized in the
following table:
 For the Year Ended December 31,2009
    
    2008
    
    2007Gas volumes  Mcf per day
    
    
    1,455
    
    
    
    1,277
    
    
    
    1,520Average gas price  per Mcf
    
    $
    3.89
    
    
    $
    8.93
    
    
    $
    7.10Oil volumes  barrels per day
    
    
    98
    
    
    
    84
    
    
    
    122Average oil price  per barrel
    
    $
    57.60
    
    
    $
    110.61
    
    
    $
    74.07NGL volumes  barrels per day
    
    
    16
    
    
    
    16
    
    
    
    26Average NGL price  per barrel
    
    $
    32.07
    
    
    $
    60.32
    
    
    $
    45.05
 Natural Gas Sales
 2009 vs. 2008
 2008 vs. 2007
 Crude Oil Sales
 2009 vs. 2008
 2008 vs. 2007
 12




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Operating Expenses
 2009 vs. 2008
 2008 vs. 2007
  Capital Resources and Liquidity
     13




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Capital Commitments
     14




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Off-Balance Sheet Arrangements
  Critical Accounting Policies and Estimates
  Reserve Estimates
 Oil and Gas Reserve Estimation and
Disclosures Extractive IndustriesOil and Gas
   15




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Asset Retirement Obligation (ARO)
    16




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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Commodity Risk
    Forward-Looking Statements and Risk
  
    
    the market prices of oil, natural gas, NGLs and other products or services;
    
    the supply and demand for oil, natural gas, NGLs and other products or services;
    
    production and reserve levels;
    
    drilling risks;
    
    economic and competitive conditions;
    
    the availability of capital resources;
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
    
    capital expenditure and other contractual obligations;
    
    weather conditions;
    
    inflation rates;
    
    the availability of goods and services;
    
    legislative or regulatory changes;
    
    terrorism;
    
    the capital markets and related risks such as general credit, liquidity, market and
interest-rate risks; and
    
    other factors disclosed under Items 1 and 2  Business and Properties  Estimated
Proved Reserves and Future Net Cash Flows, Item 1A  Risk Factors, Item 7 
Managements Discussion and Analysis of Financial Condition and Results of Operations,
Item 7A  Quantitative and Qualitative Disclosures About Market Risk and elsewhere in
this Form 10-K.
  18




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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 APACHE OFFSHORE INVESTMENT PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
 PageNumberReport of Management on Internal Control over Financial Reporting
    
    
    20Report of Independent Registered Public Accounting Firm
    
    
    21Statement of Consolidated Income for each of the three years in the period ended December 31, 2009
    
    
    22Statement of Consolidated Cash Flows for each of the three years in the period ended December 31, 2009
    
    
    23Consolidated Balance Sheet as of December 31, 2009 and 2008
    
    
    24Statement of Consolidated Changes in Partners Capital for each of the three years in the period
ended December 31, 2009
    
    
    25Notes to Consolidated Financial Statements
    
    
    26Supplemental Oil and Gas Disclosures
    
    
    34Supplemental Quarterly Financial Data
    
    
    36
   19




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REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
    Internal
Control  Integrated Framework
 /s/  G. Steven FarrisG. Steven FarrisChairman and Chief Executive Officer 
(principal executive officer)
of Apache Corporation, Managing Partner/s/  Roger B. PlankRoger B. PlankPresident (principal financial officer)
of Apache Corporation, Managing Partner/s/  Rebecca A. HoytRebecca A. HoytVice President and Controller
(principal accounting officer)
of Apache Corporation, Managing Partner 
 20




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      ERNST & YOUNG LLP 
 21




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED INCOME
 For the Year Ended December 31,2009
    
    
    2008
    
    
    2007REVENUES:Oil and gas sales
    
    $
    4,310,969
    
    
    $
    7,927,690
    
    
    $
    7,679,104Interest income
    
    
    229
    
    
    
    46,193
    
    
    
    104,2744,311,198
    
    
    
    7,973,883
    
    
    
    7,783,378OPERATING EXPENSES:Depreciation, depletion and amortization
    
    
    960,632
    
    
    
    901,633
    
    
    
    998,826Asset retirement obligation accretion
    
    
    67,297
    
    
    
    63,489
    
    
    
    44,522Lease operating expenses
    
    
    1,445,122
    
    
    
    1,153,688
    
    
    
    1,393,734Gathering and transportation costs
    
    
    88,064
    
    
    
    69,022
    
    
    
    96,082Administrative
    
    
    418,000
    
    
    
    451,154
    
    
    
    416,0002,979,115
    
    
    
    2,638,986
    
    
    
    2,949,164NET INCOME
    
    $
    1,332,083
    
    
    $
    5,334,897
    
    
    $
    4,834,214NET INCOME ALLOCATED TO:Managing Partner
    
    $
    446,888
    
    
    $
    1,228,783
    
    
    $
    1,145,720Investing Partners
    
    
    885,195
    
    
    
    4,106,114
    
    
    
    3,688,494$
    1,332,083
    
    
    $
    5,334,897
    
    
    $
    4,834,214NET INCOME PER INVESTING PARTNER UNIT
    
    $
    867
    
    
    $
    3,976
    
    
    $
    3,531WEIGHTED AVERAGE INVESTING PARTNER
UNITS OUTSTANDING
    
    
    1,021.5
    
    
    
    1,032.7
    
    
    
    1,044.5
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
STATEMENT OF CONSOLIDATED CASH FLOWS
 For the Year Ended December 31,2009
    
    
    2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    1,332,083
    
    
    $
    5,334,897
    
    
    $
    4,834,214Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    960,632
    
    
    
    901,633
    
    
    
    998,826Asset retirement obligation accretion
    
    
    67,297
    
    
    
    63,489
    
    
    
    44,522Dismantlement and abandonment cost
    
    
    (37,720
    )
    
    
    
    
    
    
    Changes in operating assets and liabilities:(Increase) decrease in accrued receivables
    
    
    (13,594
    )
    
    
    31,441
    
    
    
    170,918Increase (decrease) in accrued operating
expense
    
    
    7,799
    
    
    
    (139,712
    )
    
    
    150,712Increase (decrease) in receivable/payable from
Apache Corporation
    
    
    (329,519
    )
    
    
    195,645
    
    
    
    (123,581
    )Net cash provided by operating activities
    
    
    1,986,978
    
    
    
    6,387,393
    
    
    
    6,075,611CASH FLOWS FROM INVESTING ACTIVITIES:Additions to oil and gas properties
    
    
    (610,279
    )
    
    
    (956,051
    )
    
    
    (153,814
    )Increase (decrease) in accrued development cost
    
    
    (22,629
    )
    
    
    22,629
    
    
    
    Net cash used in investing activities
    
    
    (632,908
    )
    
    
    (933,422
    )
    
    
    (153,814
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repurchase of Partnership Units
    
    
    
    
    
    
    (228,995
    )
    
    
    (124,512
    )Distributions to Investing Partners
    
    
    
    
    
    
    (5,679,725
    )
    
    
    (4,184,610
    )Distributions to Managing Partner
    
    
    (437,273
    )
    
    
    (1,195,521
    )
    
    
    (1,189,789
    )Net cash used in financing activities
    
    
    (437,273
    )
    
    
    (7,104,241
    )
    
    
    (5,498,911
    )NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
    
    
    916,797
    
    
    
    (1,650,270
    )
    
    
    422,886CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR
    
    
    1,131,615
    
    
    
    2,781,885
    
    
    
    2,358,999CASH AND CASH EQUIVALENTS, END OF YEAR
    
    $
    2,048,412
    
    
    $
    1,131,615
    
    
    $
    2,781,885
 
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APACHE OFFSHORE INVESTMENT PARTNERSHIP
CONSOLIDATED BALANCE SHEET
 December 31,2009
    
    
    2008ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    2,048,412
    
    
    $
    1,131,615Accrued revenues receivable
    
    
    319,734
    
    
    
    330,818Accrued insurance receivable
    
    
    24,678
    
    
    
    Receivable from Apache Corporation
    
    
    82,902
    
    
    
    2,475,726
    
    
    
    1,462,433OIL AND GAS PROPERTIES, on the basis of full cost accounting:Proved properties
    
    
    188,458,320
    
    
    
    186,955,531Less  Accumulated depreciation, depletion and amortization
    
    
    (182,698,178
    )
    
    
    (181,737,546
    )5,760,142
    
    
    
    5,217,985$
    8,235,868
    
    
    $
    6,680,418LIABILITIES AND PARTNERS CAPITALCURRENT LIABILITIES:Accrued operating expense
    
    $
    106,405
    
    
    $
    98,606Accrued exploration and development
    
    
    
    
    
    
    22,629Payable to Apache Corporation
    
    
    
    
    
    
    246,617106,405
    
    
    
    367,852ASSET RETIREMENT OBLIGATION
    
    
    2,043,895
    
    
    
    1,121,808COMMITMENTS AND CONTINGENCIES (Note 7)PARTNERS CAPITAL:Managing Partner
    
    
    74,080
    
    
    
    64,465Investing Partners (1,021.5 Units outstanding)
    
    
    6,011,488
    
    
    
    5,126,2936,085,568
    
    
    
    5,190,758$
    8,235,868
    
    
    $
    6,680,418
 
 24




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APACHE OFFSHORE INVESTMENT PARTNERSHIP


STATEMENT OF CONSOLIDATED CHANGES IN PARTNERS CAPITAL
 Managing
    
    
    InvestingPartner
    
    
    Partners
    
    
    TotalBALANCE, DECEMBER 31, 2006
    
    $
    75,272
    
    
    $
    7,549,527
    
    
    $
    7,624,799Distributions
    
    
    (1,189,789
    )
    
    
    (4,184,610
    )
    
    
    (5,374,399
    )Repurchase of Partnership Units
    
    
    
    
    
    
    (124,512
    )
    
    
    (124,512
    )Net income
    
    
    1,145,720
    
    
    
    3,688,494
    
    
    
    4,834,214BALANCE, DECEMBER 31, 2007
    
    $
    31,203
    
    
    $
    6,928,899
    
    
    $
    6,960,102Distributions
    
    
    (1,195,521
    )
    
    
    (5,679,725
    )
    
    
    (6,875,246
    )Repurchase of Partnership Units
    
    
    
    
    
    
    (228,995
    )
    
    
    (228,995
    )Net income
    
    
    1,228,783
    
    
    
    4,106,114
    
    
    
    5,334,897BALANCE, DECEMBER 31, 2008
    
    $
    64,465
    
    
    $
    5,126,293
    
    
    $
    5,190,758Distributions
    
    
    (437,273
    )
    
    
    
    
    
    
    (437,273
    )Net income
    
    
    446,888
    
    
    
    885,195
    
    
    
    1,332,083BALANCE, DECEMBER 31, 2009
    
    $
    74,080
    
    
    $
    6,011,488
    
    
    $
    6,085,568
 
 25




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) ORGANIZATION
 Nature of Operations
      26




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Right of Presentment
    Right of Presentment Valuation
    
    
    
    
    
    Valuation Price PerDate
    
    Total Valuation Price
    
    UnitDecember 31, 2006
    
    $
    15,207,303
    
    
    $
    12,507June 30, 2007
    
    
    13,866,608
    
    
    
    11,282December 31, 2007
    
    
    15,806,599
    
    
    
    13,225June 30, 2008
    
    
    17,239,136
    
    
    
    13,245December 31, 2008
    
    
    9,701,665
    
    
    
    9,497June 30, 2009
    
    
    8,864,008
    
    
    
    8,677
 2009
    
    2008
    
    2007Investing Partner Units Outstanding:Balance, beginning of year
    
    
    1,021.5
    
    
    
    1,038.2
    
    
    
    1,048.3Repurchase of Partnership Units
    
    
    
    
    
    
    (16.7
    )
    
    
    (10.1
    )Balance, end of year
    
    
    1,021.5
    
    
    
    1,021.5
    
    
    
    1,038.2
 Capital Contributions
  27




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Statement Presentation
  Cash Equivalents
  Oil and Gas Properties
    Oil and Gas Reserve Estimation and Disclosures Extractive IndustriesOil and Gas
  28




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Asset Retirement Obligation
  Revenue Recognition
  Insurance Coverage
  Net Income Per Investing Unit
  Income Taxes
  Use of Estimates
  29




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Receivable from / Payable to Apache Corporation
  Maintenance and Repairs
  Shipping and Handling Costs
  Recently Issued Accounting Standards Not Yet Adopted
  (3) COMPENSATION TO APACHE
  Total Reimbursed by the InvestingPartners for the Year Ended December 31,2009
    
    
    2008
    
    
    2007(In thousands)a. Apache is
reimbursed for general, administrative and overhead expenses incurred in connection with the
management and operation of the Partnerships business
    
    $
    334
    
    
    $
    361
    
    
    $
    333b. Apache is
reimbursed for development overhead costs incurred in the Partnerships operations. These costs are
based on development activities and are capitalized to
oil and gas properties
    
    $
    30
    
    
    $
    26
    
    
    $
    7
  30




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (4) OIL AND GAS PROPERTIES
  2009
    
    
    2008
    
    
    2007(In thousands)Oil and Gas PropertiesBalance, beginning of year
    
    $
    186,955
    
    
    $
    185,999
    
    
    $
    185,574Costs incurred during the year:Development Investing Partners
    
    
    1,407
    
    
    
    939
    
    
    
    319Managing Partner
    
    
    96
    
    
    
    17
    
    
    
    106Balance, end of year
    
    $
    188,458
    
    
    $
    186,955
    
    
    $
    185,999
  Managing Partner
    
    
    Investing Partners
    
    
    Total(In thousands)Accumulated Depreciation, Depletion and AmortizationBalance, December 31, 2006
    
    $
    20,893
    
    
    $
    158,944
    
    
    $
    179,837Provision
    
    
    4
    
    
    
    995
    
    
    
    999Balance, December 31, 2007
    
    $
    20,897
    
    
    $
    159,939
    
    
    $
    180,836Provision
    
    
    16
    
    
    
    886
    
    
    
    902Balance, December 31, 2008
    
    $
    20,913
    
    
    $
    160,825
    
    
    $
    181,738Provision
    
    
    18
    
    
    
    942
    
    
    
    960Balance, December 31, 2009
    
    $
    20,931
    
    
    $
    161,767
    
    
    $
    182,698
  (5) MAJOR CUSTOMER AND RELATED PARTIES INFORMATION
     31




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  (6) FINANCIAL INSTRUMENTS
  (7) COMMITMENTS AND CONTINGENCIES
 Litigation 
 Environmental 
 (8) ASSET RETIREMENT OBLIGATION
  2009
    
    
    2008Asset retirement obligation at beginning of period
    
    $
    1,121,808
    
    
    $
    1,058,319Accretion expense
    
    
    67,297
    
    
    
    63,489Liabilities settled
    
    
    (37,720
    )
    
    
    Revisions in estimated liabilities
    
    
    892,510
    
    
    
    Asset retirement obligation at December 31
    
    $
    2,043,895
    
    
    $
    1,121,808
   32




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (9) TAX-BASIS FINANCIAL INFORMATION
  2009
    
    
    2008
    
    
    2007Net partnership ordinary income for federal income
tax reporting purposes
    
    $
    1,464,728
    
    
    $
    5,184,702
    
    
    $
    5,475,029Plus: Items of current expense for tax reporting
purposes only Intangible drilling cost
    
    
    579,318
    
    
    
    851,644
    
    
    
    35,699Dismantlement and abandonment cost
    
    
    37,720
    
    
    
    
    
    
    
    Tax depreciation
    
    
    278,246
    
    
    
    263,673
    
    
    
    366,834895,284
    
    
    
    1,115,317
    
    
    
    402,533Less: full cost DD&A expense
    
    
    (960,632
    )
    
    
    (901,633
    )
    
    
    (998,826
    )Less: asset retirement obligation accretion
    
    
    (67,297
    )
    
    
    (63,489
    )
    
    
    (44,522
    )Net income
    
    $
    1,332,083
    
    
    $
    5,334,897
    
    
    $
    4,834,214
   December 31,2009
    
    
    2008Liabilities for federal income tax purposes
    
    $
    106,405
    
    
    $
    367,852Asset retirement liability
    
    
    2,043,895
    
    
    
    1,121,808Liabilities under accounting principles generally
accepted in the United States
    
    $
    2,150,300
    
    
    $
    1,489,660
  (10) SUBSEQUENT EVENTS
  33




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
SUPPLEMENTAL OIL AND GAS DISCLOSURES
(UNAUDITED)
 Oil and Gas Reserve Information
        2009
    
    
    2008
    
    
    2007Oil
    
    
    Gas
    
    
    Oil
    
    
    Gas
    
    
    Oil
    
    
    GasProved ReservesBeginning of year
    
    
    492
    
    
    
    2,422
    
    
    
    571
    
    
    
    3,004
    
    
    
    605
    
    
    
    3,433Extensions, discoveries and other additions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Revisions of previous estimates
    
    
    105
    
    
    
    536
    
    
    
    (42
    )
    
    
    (114
    )
    
    
    20
    
    
    
    126Production
    
    
    (42
    )
    
    
    ( 531
    )
    
    
    (37
    )
    
    
    ( 468
    )
    
    
    (54
    )
    
    
    (555
    )End of year
    
    
    555
    
    
    
    2,427
    
    
    
    492
    
    
    
    2,422
    
    
    
    571
    
    
    
    3,004Proved DevelopedBeginning of year
    
    
    492
    
    
    
    2,317
    
    
    
    571
    
    
    
    2,899
    
    
    
    605
    
    
    
    3,328End of year
    
    
    555
    
    
    
    2,322
    
    
    
    492
    
    
    
    2,317
    
    
    
    571
    
    
    
    2,899
   34




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APACHE OFFSHORE INVESTMENT PARTNERSHIP
SUPPLEMENTAL OIL AND GAS DISCLOSURES  (Continued)
(UNAUDITED)
   Future Net Cash Flows
   Discounted Future Net Cash Flows Relating to Proved Reserves
 December 31,2009
    
    
    2008
    
    
    2007(In thousands)Future cash inflows
    
    $
    40,838
    
    
    $
    36,059
    
    
    $
    70,569Future production costs
    
    
    (7,499
    )
    
    
    (7,580
    )
    
    
    (8,710
    )Future development costs
    
    
    (6,026
    )
    
    
    (4,136
    )
    
    
    (4,421
    )Net cash flows
    
    
    27,313
    
    
    
    24,343
    
    
    
    57,43810 percent annual discount rate
    
    
    (12,760
    )
    
    
    (8,312
    )
    
    
    (25,539
    )Discounted future net cash flows
    
    $
    14,553
    
    
    $
    16,031
    
    
    $
    31,899
  For the Year Ended December 31,2009
    
    
    2008
    
    
    2007(In thousands)Sales, net of production costs
    
    $
    (2,778
    )
    
    $
    (6,705
    )
    
    $
    (6,189
    )Net change in prices and production costs
    
    
    797
    
    
    
    (13,629
    )
    
    
    10,719Revisions of quantities
    
    
    4,439
    
    
    
    (1,083
    )
    
    
    1,469Accretion of discount
    
    
    1,603
    
    
    
    3,190
    
    
    
    2,777Changes in future development costs
    
    
    (843
    )
    
    
    285
    
    
    
    (453
    )Changes in production rates and other
    
    
    (4,696
    )
    
    
    2,074
    
    
    
    (4,189
    )$
    (1,478
    )
    
    $
    (15,868
    )
    
    $
    4,134
 35




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APACHE OFFSHORE INVESTMENT PARTNERSHIP

SUPPLEMENTAL QUARTERLY FINANCIAL DATA

(UNAUDITED)
 First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    Total(In thousands, except per Unit amounts)2009Revenues
    
    $
    1,131
    
    
    $
    759
    
    
    $
    1,074
    
    
    $
    1,347
    
    
    $
    4,311Expenses
    
    
    832
    
    
    
    696
    
    
    
    716
    
    
    
    735
    
    
    
    2,979Net income
    
    $
    299
    
    
    $
    63
    
    
    $
    358
    
    
    $
    612
    
    
    $
    1,332Net income allocated to:Managing Partner
    
    $
    116
    
    
    $
    48
    
    
    $
    111
    
    
    $
    172
    
    
    $
    447Investing Partners
    
    
    183
    
    
    
    15
    
    
    
    247
    
    
    
    440
    
    
    
    885$
    299
    
    
    $
    63
    
    
    $
    358
    
    
    $
    612
    
    
    $
    1,332Net income per Investing
Partner Unit (1)
    
    $
    180
    
    
    $
    15
    
    
    $
    242
    
    
    $
    430
    
    
    $
    8672008Revenues
    
    $
    2,210
    
    
    $
    2,610
    
    
    $
    2,042
    
    
    $
    1,112
    
    
    $
    7,974Expenses
    
    
    602
    
    
    
    634
    
    
    
    739
    
    
    
    664
    
    
    
    2,639Net income
    
    $
    1,608
    
    
    $
    1,976
    
    
    $
    1,303
    
    
    $
    448
    
    
    $
    5,335Net income allocated to:Managing Partner
    
    $
    361
    
    
    $
    438
    
    
    $
    297
    
    
    $
    133
    
    
    $
    1,229Investing Partners
    
    
    1,247
    
    
    
    1,538
    
    
    
    1,006
    
    
    
    315
    
    
    
    4,106$
    1,608
    
    
    $
    1,976
    
    
    $
    1,303
    
    
    $
    448
    
    
    $
    5,335Net income per Investing
Partner Unit (1)
    
    $
    1,201
    
    
    $
    1,485
    
    
    $
    977
    
    
    $
    306
    
    
    $
    3,976
 
 (1)
    
    The sum of the individual net income per Investing Partner Unit may not agree with
the year-to-date net income per Investing Partner Unit as each quarterly computation is
based on the weighted average number of Investing Partner Units during that period. 36




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ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
 Disclosure Control and Procedures
  Report on Internal Control Over Financial Reporting
  Changes in Internal Control Over Financial Reporting
  
 ITEM 9B.
    
    OTHER INFORMATION
  37




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PART III
 
 ITEM 10.
    
    DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
  Code of Business Conduct
  
 ITEM 11.
    
    EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  38




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##### Table of Contents



PART IV
 
 ITEM 15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
 a.
    
    (1) Financial Statements  See accompanying index to financial statements in Item 8 above.(2) Financial Statement Schedules  See accompanying index to financial statements in Item
8 above.(3) Exhibits
 3.1
    
    Partnership Agreement of Apache Offshore Investment Partnership
(incorporated by reference to Exhibit (3)(i) to Form 10 filed by Partnership with
the Commission on April 30, 1985, Commission File No. 0-13546).3.2
    
    Amendment No. 1, dated February 11, 1994, to the Partnership Agreement
of Apache Offshore Investment Partnership (incorporated by reference to Exhibit 3.3
to Partnerships Annual Report on Form 10-K for the year ended December 31, 1993,
Commission File No. 0-13546).3.3
    
    Limited Partnership Agreement of Apache Offshore Petroleum Limited
Partnership (incorporated by reference to Exhibit (3)(ii) to Form 10 filed by
Partnership with the Commission on April 30, 1985, Commission File No. 0-13546).10.1
    
    Form of Assignment and Assumption Agreement between Apache Corporation
and Apache Offshore Petroleum Limited Partnership (incorporated by reference to
Exhibit 10.2 to Partnerships Quarterly Report on Form 10-Q for the quarter ended
June 30, 1992, Commission File No. 0-13546).10.2
    
    Joint Venture Agreement, dated as of November 23, 1992, between Apache
Corporation and Apache Offshore Petroleum Limited Partnership (incorporated by
reference to Exhibit 10.6 to Partnerships Annual Report on Form 10-K for the year
ended December 31, 1992, Commission File No. 0-13546).10.3
    
    Matagorda Island 681 Field Purchase and Sale Agreement with Option to
Exchange, dated November 24, 1992, between Apache Corporation, Shell Offshore, Inc.
and SOI Royalties, Inc. (incorporated by reference to Exhibit 10.7 to Partnerships
Annual Report on Form 10-K for the year ended December 31, 1992, Commission File No.
0-13546).*23.1
    
    Consent of Ryder Scott Company, L.P., Petroleum Consultants.*31.1
    
    Certification of Principal Executive Officer.*31.2
    
    Certification of Principal Financial Officer.*32.1
    
    Certification of Principal Executive Officer and Principal Financial Officer.*99.1
    
    Report of Ryder Scott Company, L.P., Petroleum Consultants.99.2
    
    Consent statement of the Partnership, dated January 7, 1994 (incorporated
by reference to Exhibit 99.1 to Partnerships Annual Report on Form 10-K for the
year ended December 31, 1993, Commission File No. 0-13546).99.3
    
    Proxy statement to be dated on or about March 31, 2010, relating to the
2010 annual meeting of stockholders of Apache Corporation (incorporated by reference
to the document filed by Apache pursuant to Rule 14A, Commission File No. 1-4300).
 
 *
    
    Filed herewith. b.
    
    See a (3) above.c.
    
    See a (2) above.
 39




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##### Table of Contents



SIGNATURES
  APACHE OFFSHORE INVESTMENT PARTNERSHIPBy:
    Apache Corporation, Managing PartnerDate:      February 26, 2010
    By:
    /s/ G. Steven FarrisG. Steven FarrisChairman of the Board and Chief Executive Officer POWER OF ATTORNEY
   Name
    
    Title
    
    Date/s/ G. Steven Farris
    
    Chairman of the Board and Chief
Executive Officer
    
    February 26,
2010G. Steven Farris
    
    (principal executive officer)/s/ Roger B. Plank
    
    President (principal financial
officer)
    
    February 26,
2010Roger B. Plank/s/ Rebecca A. Hoyt
    
    Vice President and Controller
    
    February 26,
2010Rebecca A. Hoyt
    
    (principal accounting officer)




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Name
    
    Title
    

Date/s/ Frederick M. Bohen
    
    Director
    
    February 26,
2010Frederick M. Bohen/s/ Randolph M. Ferlic
    
    Director
    
    February 26,
2010Randolph M. Ferlic/s/ Eugene C. Fiedorek

Eugene C. Fiedorek
    
    Director
    
    February 26,
2010/s/ A. D. Frazier, Jr.
    
    Director
    
    February 26,
2010A. D. Frazier, Jr./s/ Patricia Albjerg Graham
    
    Director
    
    February 26,
2010Patricia Albjerg Graham/s/ John A. Kocur
    
    Director
    
    February 26,
2010John A. Kocur/s/ George D. Lawrence
    
    Director
    
    February 26,
2010George D. Lawrence/s/ F. H. Merelli
    
    Director
    
    February 26,
2010F. H. Merelli/s/ Rodman D. Patton
    
    Director
    
    February 26,
2010Rodman D. Patton/s/ Charles J. Pitman
    
    Director
    
    February 26,
2010Charles J. Pitman